Precision Drilling, an oil and gas company, paid a settlement to an injured worker. Precision sought repayment of the settlement expenditure from its insurer, Lexington. Lexington denied the claim based on Wyoming’s anti-indemnity statute, Wyo. Stat. Ann. § 30- 1-131(a)(iii)(B), which prohibits agreements seeking to relieve indemnity from those who operate oil and gas wells. The district court granted summary judgment to Lexington, holding it free from liability and granting it fees and costs. Precision appealed.

The Tenth Circuit analyzed the statute in question and remarked that immediately following the prohibition on relief from indemnity was an exception for insurance contracts. Lexington argued that the Wyoming legislature intended to limit the insurance clause to only those entities that purchase their own insurance policies, but the Tenth Circuit disagreed, declining to read language into the statute’s plain and unambiguous exception. The Tenth Circuit refused to speculate as to the intentions of the Wyoming legislature.

Lexington also argued that the absurdity doctrine prevented Precision from recovering its settlement payments. The Tenth Circuit again disagreed after examining the use of that doctrine in Wyoming’s courts. Because the statutory language in this case was plain, unambiguous, and not obviously erroneous, the Tenth Circuit rejected Lexington’s absurdity doctrine argument.

The Tenth Circuit reversed summary judgment and remanded for further proceedings. Judge Lucero wrote a separate concurrence to comment that he would not have even explored Lexington’s absurdity doctrine argument because Lexington did not raise the issue until oral arguments.

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